Scots-Chinese deal as Vice Premier Li Keqiang visits UK

Scotland and China have sealed a major green energy deal, as Chinese Vice Premier Li Keqiang began a four-day visit to the UK.

The agreement, worth $10m (£6.4m), will see technology pioneered in Scotland used at a new renewable energy conversion plant in China.

Confirmation of the deal came as Mr Li and his delegation arrived in Edinburgh for the first day of his visit.

The vice premier is also meeting Prime Minister David Cameron in London.

The visit has a focus on promoting trade and political links with the UK and other European nations.

Mr Li - widely tipped to become the next Chinese premier - will also meet key UK government figures in London, including Deputy Prime Minister Nick Clegg, Chancellor George Osborne and Foreign Secretary William Hague.

Scottish First Minister Alex Salmond said the licensing deal was reached between Sino-Scots firm Shanghai Huanuan Boiler and Vessel Co/Cochran and Scotland-based engineers W2E Engineering, which specialises in generating electricity from domestic refuse.

SHBV/Cochran has its Scottish base at Annan in Dumfriesshire.

Mr Salmond, who has led several trade missions to China over the past two years, said the visit was vital for building economic growth, especially in renewable energy.

Analysis

By Bridget KendallDiplomatic correspondent, BBC News

One of the most important in a new and upcoming generation of Chinese officials, Li Keqiang is widely tipped to take over as China's next premier.

This is his first proper outing on the European stage. On this tour he's already met Chancellor Merkel in Germany, signed deals with German carmakers and offered to buy over $7bn worth of Spanish debt.

These earlier stopovers are designed to signal that the EU as a whole is still seen as key to China's future growth, and reassure European nations that they are important partners.

In Britain over the next four days, the focus will be on the economy. Today's tour of the innovative wave and tidal energy project in Leith is to signal that the UK and Scotland are at the forefront of hi-tech renewable technology that China is keen to acquire.

The message is that both sides, not only indebted Britain, can benefit from a deeper relationship.

"China already has the largest deployment of on-shore renewable technology, and Scotland is a world-leader in pioneering the technology and application of clean, green energy," he said.

"This announcement is another positive step forward in strengthening Sino-Scottish links and confirming Scotland's reputation as a global leader in the development of renewable energy."

Shanghai Huanuan chairman Dong Ping added: "This agreement will see the creation of new green power stations built in Scotland and in China and this will generate sustainable renewable energy at a reduced cost for our global customers."

On the first day of the trip, Mr Li held talks with Scottish Secretary Michael Moore and also visited the renewable energy firm Pelamis Wave Power.

Mr Moore described the meeting as "very constructive", adding: "China and the UK are key partners in growth for the future.

"There are a huge number of economic opportunities which exist between China and Scotland and I am keen to see us take advantage of our excellent trading links and create new routes to market in the near future."

Mr Li is also due to deliver a speech at a China-Britain British Council banquet, ahead of his return to Beijing on Wednesday.

The vice premier's stay in the UK comes after a three-day visit to Spain, where he signed $7.5bn (£4.8bn, 5.7bn euros) in trade deals.

Mr Li also reaffirmed his country would buy Spanish government bonds, despite the recent crisis of market confidence over eurozone debt.

China has already made several Scottish trade agreements, including a deal requiring all "Scotch Whisky" sold in China to have been made in Scotland.

Anne MacColl, of the economic agency Scottish Development International, said Scotland was in a strong position to contribute to many of China's key aims, which also included life sciences, financial services and academic connections.